CAFTA-DR Free Trade Agreement

In 2004, when the Dominican Republic joined and the free trade agreement known as CAFTA it was renamed CAFTA-DR. The free trade agreement is among the following: Dominican Republic, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and the United States. Finally. The CAFTA-DR entered into force for the Dominican Republic on March 1, 2007.

The CAFTA-DR free trade agreement should improve business dealings in Dominican Republic.

The following infomation is from the Office of the United States Trade Representative – CAFTA Policy Brief – February 2005

Free Trade With Central America and the Dominican Republic
Highlights of the CAFTA…

New Opportunities for U.S. Workers and Manufacturers: Eighty percent of U.S. exports of consumer and industrial goods will become duty-free in Central American and the Dominican Republic immediately, with remaining tariffs phased out over 10 years. Key U.S. export sectors will benefit from immediate duty elimination, such as information technology products, agricultural and construction equipment, paper products, pharmaceuticals, and medical and scientific equipment. Tariffs on U.S. autos and auto parts will be phased out within 5 years. Countries not presently in the WTO Information Technology Agreement will join.

Expanded Markets for U.S. Farmers and Ranchers: More than half of current U.S. farm exports to Central America and the Dominican Republic will become duty-free immediately, including high-quality cuts of beef, soybeans, cotton, wheat, many fruits and vegetables, and processed food products. Tariffs on most U.S. farm products will be phased out within 15 years, with all tariffs eliminated in 20 years. Important U.S. sectors will benefit, including corn, beef, pork, poultry, rice, dry beans, dairy, and vegetable oil. The U.S. will work with Central America and the Dominican Republic to resolve sanitary and phytosanitary barriers to agricultural trade, especially problems in food inspection procedures for meat and poultry.

Sugar – A Teaspoon A Week: In the first year, additional sugar market access for Central America and the Dominican Republic will amount to about 1.2 percent of U.S. sugar production, growing to 1.7 percent in year 15. This equals about one day’s U.S. production, or approximately one teaspoon of sugar per week per adult American. Sugar imports have declined by about one-third since the mid-nineties. CAFTA would not come close to returning U.S. imports to those levels. There is no change in the high above-quota U.S. tariff on sugar, and imports under CAFTA will have no effect on the U.S. sugar programs.

Textiles and Apparel – Uniting to Compete with Asia: Garment factories in Central America and the Dominican Republic are collectively the second-largest world buyer of U.S. yarn and fabric. Apparel made in these facilities will be duty-free and quota-free under the Agreement if they use U.S. or regional fabric and yarn, thereby supporting U.S. fabric/yarn exports and jobs. This is critical, because with the recent expiration of global quotas on textiles/apparel, CAFTA positions regional garment-makers – and their U.S. suppliers of fabric and yarn – to better compete with Asia. The agreement’s benefits for textiles and apparel will be retroactive to January 1, 2004. CAFTA also contains cumulation provisions, which will allow woven apparel from the region to contain a capped amount of Mexican and Canadian inputs.

Haiti: The Administration will work with the Congress to enable Haiti to continue to be eligible to receive Caribbean Basin Trade Preference Act (CBTPA) for apparel containing inputs from the Dominican Republic.

Access to Services: Central America and the Dominican Republic will accord substantial market access across the entire services regime, offering new access in sectors such as telecommunications, express delivery, computer and related services, tourism, energy, transport, construction and engineering, financial services, insurance, audio/visual and entertainment, professional, environmental, and other sectors. Central American countries and the Dominican Republic have agreed to change “dealer protection regimes” and loosen restrictions that lock U.S. firms into exclusive or inefficient distributor arrangements.

A Trade Agreement for the Digital Age: State-of-the-art protections and non-discriminatory treatment are provided for digital products such as U.S. software, music, text, and videos. Protections for U.S. patents, trademarks and trade secrets are strengthened.

Strong Protections for Worker Rights: CAFTA goes far beyond previous FTAs in addressing worker rights issues. The Administration developed a three-part strategy that will ensure effective enforcement of domestic labor laws, establish a cooperative program to improve labor laws and enforcement, and build the capacity of Central America and the Dominican Republic to monitor and enforce labor rights.

An Innovative Environment Chapter: Central America and the Dominican Republic will participate in a robust and unique public submissions process to ensure that views of civil society are appropriately considered. The agreement requires effective enforcement of environmental laws and is complemented by an Environmental Cooperation Agreement.

Strong Protections for U.S. Investors: The agreement establishes a secure, predictable legal framework for U.S. investors in Central America and the Dominican Republic, and contains a commitment to develop an appellate mechanism for investor-state disputes.

Open and Fair Government Procurement: Provides ground-breaking anti-corruption measures in government contracting. U.S. firms are guaranteed a fair and transparent process to sell goods and services to a wide range of government entities.

Increased Transparency: The agreement’s dispute settlement mechanisms call for open public hearings, public access to documents, and the opportunity for third parties to submit views. Transparency in customs operations will aid express delivery shipments and will require more open and public processes for customs rulings and administration. Agreement also contains strong antibribery commitments, including criminalization of bribery.

U.S.- CAFTA-DR Free Trade Agreement
Frequently Asked Questions: www.export.gov

What is your opinion of the CAFTA-DR Free Trade Agreement?

Attaining Dominican Republic residency will certainly be a two-step course of action. To begin with, the foreign applicant will need to acquire provisional resident standing and then, following 1 year as being a provisional resident, he or she can submit an application for permanent resident standing.

Conditions with regard to residency tend to be effortlessly fulfilled by anyone in excellent health along with no criminal history. The actual period is normally 3 to 4 months with regard towards the provisional residency and 2 to 3 months to obtain the actual permanent residency.

The above time estimates are based on the assumption that every necessary record has been delivered and also the candidates have submited their application while inside the Dominican Republic, applying externaly or outside the Dominican Republic isn’t practical.

The candidate doesn’t have to remain in the Dominican Republic throughout the residency steps, he or she would likely just need to travel to the island two times: 1st, with regard to the medical check-ups, and 2nd, to have his / her photo taken to acquire the last documentation.

The following costs including the fees and expenses are an estimation for residency. Somewhere around $1000 to have provisional residency and an additional $800 to $1000 to obtain permanent residency. Legal service fees inside of the Dominican Republic are going to be subject to a 16% service tax.

The paperwork you’ll need to bring with you for the Dominican Republic residency and the 1st meeting will be an original birth certificate authenticated at the closest Dominican Consulate, actual marriage certificate authenticated at the nearest Dominican Consulate. It will also be necessary to bring your passport and 8 photos (2″ x 2″), 4 front pictures and 4 profile photos. No earrings or sunglasses will be allowed in the photos.

After acquiring your provisional residency, you’ll have a 6-month time period where you can bring your household goods into the Dominican Republic without having to pay any duty tax.

All residency applications are completed in Santo Domingo, the immigration regulators are based there. The applying procedure requires just one morning of your time. You’ll visit the Immigration Office and also the regulators medical center to receive your medical tests, composed of a blood test, a urine test and chest x-rays. Normally, the process is finished by midday.

Here is the Puerto Plata travel to Miami…a step-by-step process! The short trip to the Puerto Plata Airport (POP) from Sosua is a 10 to 15 minute drive. When you arrive at the airport you may be greeted by men in white uniforms. They will insist on carrying your bags 20 feet to the x-ray scanners located at the airport entrance in front of American Airlines. If you use their service be aware that there may another porter at the other end of the x-ray scanner waiting to carry your luggage to the ticket counter for another tip! A little game they played on me once!

I suggest arriving about two hours early to avoid lines. The ticket agent will need to see your passport to issue your airline ticket. They will tag, weigh and check in your luggage. You will not carry the bags to another baggage check in area like you do in Miami. The agent will also give you two customs forms. One for the Dominican Republic and the other for U.S. Customs back in Miami.

After you get your ticket go directly to the security checkpoint which is to the left of the airlines ticket counter. The Customs Officer will want to see your passport.

Next, you will go through the x-ray scanners. No need to take your lap top out of your carry on bag at the Puerto Plata International Airport. Take off your shoes and jewelry and walk through the scanner.

Next stop is Customs. Usually there is no line if your arrive early. Give the Customs Officer your passport and the Dominican Republic Customs Form. They usually will ask how long you were in the country and send you on your way to the terminal if you did not stay beyond 30 days. More than 30 days in the Dominican Republic will cost you a fine of around $20.00.

It’s about a 5 minute walk to your gate and you will pass through a mall of duty free shops. Once you reach your gate area there will be more shops, bars and restaurants.

As you board the airplane keep your ticket and passport handy. The flight to Miami is about 1 1/2 hours. Complete the form for U.S. Customs before you arrive in Miami.

When you arrive at Miami (MIA) you will go directly to baggage claim then through Customs where they will want your customs form and passport. The final security checkpoint will waive you through or search your luggage.

If you parked in the Dolphin Garage take the elevator to the third floor and the crosswalk to the garage. Take the garage elevator to the level you parked on. Leaving the airport is easy. Just pay the $15.00 per day for parking and you are on your way home.

If you are connecting to another flight you will still be required to go through customs, get your luggage and take it to the connecting airlines luggage area.

The trip to Puerto Plata is much quicker and takes less time than the return trip to Miami! One tip about the long lines at Miami Customs! Walk all the way to the very last row next to the elevator and you will see an additional seven or eight lines that will have far fewer people standing in line.

Here is my travel experience from Miami to Puerto Plata,  step-by-step…When flying out of Miami to Puerto Plata get there early. I suggest 3 hours early if you’re traveling during the winter season months. Most likely you will have plenty of free time after getting your tickets, checking your luggage, and going through security but it’s worth it.

The lines are usually long and once you see the desperation on the faces of those who are still in line and their flight is about to board…WELL, get there early!

If you park in long term parking there’s two garages, Dolphin and Flamingo. I like to park in the Dolphin garage. There are crosswalks to the terminal on the third level. You will find better parking spaces available on the 2nd or 4th level near the elevator. Just take it to the third level and follow the signs for your airlines.

Don’t forget where you park! There is a machine at the elevator that will stamp your location on the parking ticket.

Expect a five or ten minute walk from the garage to your airline ticket counter. Once you arrive at the ticketing center expect to see lots of people and long lines. Don’t attempt to guess which line is yours! Ask a customer service agent, they are everywhere. Just tell them where you are going and what time you are leaving Miami. This tends to be a little smoother now with the automated check ins using the computers. The lines used to be about 30 minutes to 1 hour to get your ticket and check your baggage.

Once you get your ticket you’ll need to check it at the ticket counter! Place the non carry-on baggage on the weigh scales. Over 50 pounds may result in additional charges! The rep will tag your luggage and you will take it with you to the baggage check in area. 

Give them you luggage and continue to the security checkpoint with your carry on bags. This line usually moves rapidly. Keep your airline ticket and passport handy as you will be asked by security personnel for it several times.

Before going through the security and x-ray scanners don’t forget to remove your laptop from your carry-on bag. Take off your shoes and remove jewelry, keys, coins, belts, and anything that can set off an alarm.

Now you are on your way to the terminal. Just another 10 minute or 15 minute walk!

The flight from Miami to Puerto Plata will take about 1 1/2 hours. The airline steward will give you two Customs forms to complete. Take a pen with you so you can fill the forms out on the plane.

When you arrive at Puerto Plata you will go directly to Customs. The first line will be to purchase a Tourist Card (sold at US $10). Proceed to Customs where the line is usually short. The easiest way to present you documents to the Customs Officer is to place the two Customs forms that you completed on the airplane and the tourist card inside your passport and give it to them. They will return to you the passport, tourist card and one of the Customs forms. Proceed another 10 feet to give the next person the tourist card. Proceed to baggage claim! It’s about 50 feet to the baggage claim area and you will see the money exchange agents as you enter. Their rate is not usually good so wait until you get to Sosua. Taxi drivers accept US dollars.

Claim your baggage and proceed to the final checkpoint. Give the security personnel your completed Customs form and they will either waive you through or search your suitcase. It’s a random process and they only looked in my baggage once. No big deal…

Now hold on tight to your bags as there will be an airport porter in a uniform expecting to carry your bags to the taxi area which is about a two minute walk. Just say no and they will not persist.

If you have not made prior hotel transfer arrangements you will find plenty of taxi drivers to assist you. When approached ask if they have there own taxi. Sometimes they are not taxi drivers and just want to walk you to a cab then expect a tip for their service.

Sousa is just a short 10 minute drive from the airport in Puerto Plata.

Everyone wants to know about Sosua Rentals! I did a post about hotels on my Sosua travel website but so many tourists want to find out about condo rentals. I’m not going to go into detail here but if you want to do a little research, here are some Sosua rental developments to research on Google. They are all condo and villa developments that offer weekly rentals.

If you are looking for a more upscale beach condo rental in town take a look at Infiniti Blu, La Puntilla, Los Balcones and Galeria Beachfront Residences! Upscale luxury villas are in Haciendas El Choco or Sea Horse Ranch. A popular community with nice and affordable villas for rent on a weekly basis is Casa Linda, Perla Marina and Ocean Sands Estates.

Also, in town but not oceanfront is El Neptuno which is a very well managed condo development and popular with returning tourists. Las Terrazas is also an affordable beachfront and ocean view condominium community right in town. Another ocean view condo project to research is Blue Bayou which sits on a cliff with amazing ocean views and steps to a secluded beach.

You should also include in your search for Sosua Rentals: Aqua Blue, Blue Fish, Club Residencial, Panorama Village, Residencial Hispaniola, Sosua Ocean Village, Sosnovka, The Palms and Tradewinds. They all have something unique to offer.

If you are looking for an inexpensive Caribbean vacations here are two of my picks…

The first one is for those of you who want to be close to the nightlife! Club Residencial is very popular and a condo resort you’ll want to reserve well in advance. There weekly prices are extremely affordable and the resort is clean and modern. It is within walking distance of everything in Sosua including dozens of bars, restaurants and discos.

The second suggestion is Las Canas, five minutes away in the hills of Sosua. This is for the Caribbean traveler looking for a peaceful and more tranquil experience. Las Canas is a condo hotel with one and two bedroom units. The rates are about $350 weekly for a one bedroom. Las Canas has a restaurant, lobby cafe, laundry service and a mini mart. They also have a shuttle service that will take you to town a couple times a day. The pool is one of the largest I’ve ever seen with over one million gallons of water. I own a condo in Las Canas and live there part time!

I hope this helps with your research! It is extremely important to understand your options and choose the best accommodations for your Sosua vacation. There really is something here for everyone. My Sosua travel website can offer you more resources to help with your future vacation plans to Sosua.

While on vacation in the Dominican Republic you just may fall in love with the north coast. If that happens, you are welcome to visit my Sosua Real Estate blog to find out more about investing in Dominican property.

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La Colonia Golf Resort is a new Puerto Plata real estate development.  The La Colonia Golf Resort is only five miles from the international airport at Puerto Plata and thirty minutes from the famous beach town of Cabarete.

If the Puerto Plata area of the north coast interests you than this is a development you must see.  It is a world-class leisure resort complex that will consist of 1,000 luxury golf course villas, 200 apartments and protected swimming beach.

Once this project is completed, La Colonia will offer a world class hotel/leisure complex and great amenities. I don’t have access to the latest price list but in the middle of 2009 the projected sale prices were between (U.S.) $450,000 and $750,000.

Luxury 2-bed or 3-bed villas with fantastic mountain views can be purchased for somewhere in the mid $300,000’s. The first phase was completed in 2009!

La Colonia will have a lot to do within the gated community including golf, tennis, shopping, horseback riding, beach club, spa and swimming. During the construction of future phases the La Colonia Golf Resort is planning a boutique golf/short-stay hotel, restaurants, spa shops, tour desk.

Amenities Include:

• Pondo designed golf course
• Beach club
• Spa
• Swimming pools
• Central shopping and dining complex
• Boutique hotel
• Landscaped gardens
• 24-hour security and maintenance
• Full maid service available
• Rental management service available

Have you taken a tour of La Colonia Golf Resort? What is your opinion of this new project? I would really like to get your opinion on La Colonia and the Puerto Plata real estate market! How does the prices compare to other Puerto Plata properties? You can share your comments by replying to this post below.

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Interested In Forming a Dominican Corporation to Hold Real Estate?

Back in 2007 when I visited the Dominican Republic for the first time I started sending emails to one of the best Attorney’s on the island with lots of legal questions. One of the questions I asked Attorney Fabio J. Guzman was about the laws and how to form a Dominican corporation!

Attorney Guzman replied to my email and said that a minimum of seven stockholders is required. So I wondered who I would want named as a partial owner of my Sosua real estate! Attorney Fabio Guzman went on to say that law firms generally provide nominees when shareholders are less than seven.

Here is a direct quote from the email that Attorney Guzman sent to me back in 2007.

“These nominees would transfer their shares to the real stockholder after the company is formed. The founding members subscribe the articles of incorporation, prepare a list of shareholders and declare before a Notary Public that the shares have been subscribed and paid for by the shareholders. After the documents are approved at a meeting of shareholders, and certain publicity formalities are fulfilled (filing of copies of the corporate documents at the appropriate mercantile registry), the corporation is officially formed. Shareholders must sign the documentation described above personally or through a representative with the appropriate power-of-attorney.”

Attorney Guzman also mentioned that all stockholders must be registered in the Dominican Republic, unless the share certificates are issued to the bearer. If shares are requested in bearer form, the attorney may require that clients provide the following:

• Copy of their passport’s picture page
• Reference letter from a bank in his or her country of residence
• Reference letter from an attorney in his or her country of residence
• Letter from the local Police.

The following information is required to start the Dominican incorporation process:

• Name of Dominican corporation
• Particulars (full name, nationality, occupation, marital status, address, and passport numbers) of the founding shareholders
• Capital of corporation
• Purpose of the corporation

When I asked about costs Attorney Guzman said that incorporation costs depend on the capitalization of the company. The costs range from US$1400 for a standard RD$100,000 pesos corporation to US$10,500 for a corporation with a RD$10,000,000 social capital. Legal fees in the Dominican Republic are subject to a 16% service tax. Remember, these figures were quoted back in 2007!

If you’re wondering how long this all takes I asked that question to Attorney Guzman as well and he said the time required for incorporation depends on the name chosen. If you choose a shelf numbered Dominican company, you will be in control within a week. If, on the other hand, you choose a particular name for the Dominican Corporation, the incorporation time will depend on the availability of the name which could take months. However, you can close your real estate transaction in the new corporate name before the incorporation process is completed.

I was very appreciative of Fabio Guzman taking the time to go into such detail about forming a Dominican corporation. If you have any questions for Attorney Guzman I’m sure he can offer 2010 updates to the law and help you to understand any additional information or the procedure to form a Dominican Republic company.

If there is anything you do not understand or wish to be clarified, please contact Attorney Fabio J. Guzman by email at: Fabio@DRLawyer.com or visit his website at www.DRLawyer.com.

If you would like to comment on this post please use the reply box below…what’s your experience with Dominican corporations?

If you are interested is Dominican real estate and learning more about new and existing developments visit my Sosua real estate blog!

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